April 19, 2007 (PLANSPONSOR.com) - The two largest
public pension funds in the U.S. - the California Public
Employees' Retirement System (CalPERS) and the California
State Teachers' Retirement System (CalSTRS) - are generating
a combined $21 billion in economic activity in the state each
yea, and last year alone retirement check spending created
nearly 139,000 new jobs, a recent report found.

The 154-page report by the CSUS Applied Research
Center of Sacramento State University examined the
economic ripple effects of the $13.8 billion in
retirement benefits paid to 674,000 retirees and
beneficiaries living in the state. Among other findings,
the report found that every dollar contributed to CalPERS
generates an $8.55 return for the state economy and for
every dollar contributed to CalSTRS, $6.71.

The economic activity of the two funds outpaces the
size of the forestry and fishing industries in the state
and nearly equals the size of the hotel and accommodation
industries. The overall economic output is more than the
combined value of the export goods to California’s major
trade partners, according to the report.

“This study puts an exclamation mark on what we
already knew: retirees pension payments may seem like
they are liabilities on the books of government, but in
fact they represent billions and billions of dollars that
contribute to the strength of state and local
government,” said CalPERS Chief Executive Officer Fred
Buenrostro, in a press release. “When you take into
account that 75% of a CalPERS retiree pension payment
comes from investment earnings, not tax dollars, it is
even that much more impressive.”

Over the past ten years, CalPERS has earned at an
average rate of 11.9% annually, and CalSTRS at
8.6%.

For a synopsis of the findings on CalPERS’ and
CalSTRS’ economic impact go
here
. For the full study findings on CalPERS go
here
.